Netflix shares fell approximately 9% in pre-market trading after the company issued third-quarter revenue and earnings guidance below Wall Street forecasts.
Netflix shares dropped around 9% in pre-market trading on Friday after the company issued third-quarter revenue and earnings guidance that fell short of analyst expectations. The streaming giant projected earnings of $0.82 per share, missing the consensus of $0.84, and forecasted revenue of $12.86 billion against a market expectation of $13.0 billion. Despite the near-term growth concerns, Netflix reported that its second-quarter adjusted earnings per share of $0.80 narrowly exceeded the $0.79 forecast. The company attributed recent growth to subscription price increases and the expansion of its ad-supported tier, which is on track to reach $3 billion in annual advertising revenue by 2026. While the stock has declined more than 40% over the past year, analysts remain optimistic about the company's long-term potential. Netflix also announced it will shift to an annual viewing-hours report starting in 2027 to prioritize financial performance metrics like operating profit and revenue growth.